Choose a company listed on a stock exchange and obtain its latest annual report. You can find
the latest annual reports on company website. Focus on the ‘cashflow statement’ part of the
annual report. Based on the information given in the cashflow statement, answer the
(a) What does the cashflow from operating activities section tell you about your firm?
(b) What does ‘cash from investing activities’ section indicate about the financial health of
(c) Does your company rely on outsiders for its financing? If so, is the company following a
particular capital structure theory when deciding on its financing?
Your answer should not only cover the numerical details of the cashflow statement but should
also provide an in-depth discussion of your observations on various parts of the cashflow
Let's consider AMAZON.COM,INC consolidated statement of cashflows
(a) About cashflow from operating activities
The net cash from operations of A incorporation from 2015-2017 are significantly positive. It indicate that the operations of the company are very strong and effectively good. For all the three years, it earned a positive cash from operations. Moreover, the amount of operating activities are increased gradually from 2015 to 2017
(b)About cash from investing activities
Company used cash from operations to invest in long-term assets (purchase of fixed assets or marketable securities). The company has increased the amount of investing activities from 2015 to 2017. It indicates that the company has expanded its business by its operations.
(c)About financing activities
The cash from financing activities for 2015 and 2016 is negative due to repayment of dividend, repayment of debt.
In 2017, the cash from financing activities is positive because it has proceeds from long term debt. So that they can be able to pay their debt and dividend.
From the above explanation, it is resulted that the company is doing well in generating cash, investing and then using extra cash to settle its creditors and shareholders